When we pay utility bills or buy gas, the prices reflect the direct cost of extracting and refining these resources. However, there are also hidden costs associated with fossil fuels. Most notably, they damage land, pollute air and water, and threaten public health. Though these consequences are often not factored into the monetary value of fossil fuels, we pay the price. Therefore, to accurately compare fossil fuels to solar energy, we have to look at the whole picture.
To start, let’s compare the costs of solar energy and fossil fuels as we see them now. The best way to do so is to look at average prices in the United States for each. In 2020, the average cost of residential solar was about 16¢ per kilowatt-hour (kWh) and the national average for conventional electricity was 13.28¢/kWh. In Massachusetts, this rate was even steeper, averaging 23.24 ¢/kWh. When external costs, such as human health and environmental damages, are included these costs for fossil fuels escalate. For instance, according to a study by the Center for Research on Energy and Clean Air (CREA), the economic and health costs of air pollution from burning fossil fuels could total $2.9 trillion annually. Let’s break down where these additional costs stem from.
What is an Environmental Externality?
In economics, an externality is a cost or benefit that is incurred by a third party who did not choose to experience those costs or benefits. Often, negative externalities are typically called “social costs,” and are not included in the costs of goods. Another cost to consider is environmental costs or externalities. Among others, these include air pollution, land degradation, loss of biodiversity, emissions, and many others. Externalities are often hard to quantify and estimates will vary from study to study. What is important is to recognize is that these social and environmental externalities pose a real economic cost.
The True Costs of Fossil Fuels
Land Use Impacts
Mining and drilling for fossil fuels damages surrounding ecosystems. Underground mining creates an acidic drainage that can be detrimental to plants, animals, and humans in the vicinity. Surface mining techniques, such as mountain top removal, cause extreme and often irreversible damage to local environments. Mudslides, earthquakes, landslides, flash flooding and pollution of water sources are more common in areas surrounding surface mining operations.
Water Supply and Pollution
Fossil fuel energy production is a water-intensive process. The U.S. energy system alone consumes approximately 58 trillion gallons of water each year. Large amounts of water are required for energy production at power plants, fuel extraction, refining and processing, and fuel transportation. This dependence on water is not only problematic because water is a limited resource but also because it causes water pollution. For example, drilling causes contaminated water to be brought to the surface that’s difficult to safely dispose of. Fracking, the process of injecting liquid at a high pressure into the earth to force bedrock open and extract oil, causes significant groundwater and surface water quality issues.
Oil spills are another prominent consequence of fossil fuel extraction. When oil enters the ocean, it wreaks havoc on marine ecosystems and poses major threats to aquatic life. For example, oil can poison or blind wildlife, and it can reduce animals’ insulating ability. These consequences can lead to premature death for many populations, causing biodiversity loss and negatively posing major economic burdens on the global fishing industry.
Greenhouse Gas Emissions
In the United States, burning fossil fuels for heat, electricity, and transportation is the main culprit for greenhouse gas emissions. When you think about the relationship between greenhouse gases and fossil fuels, you probably think of carbon dioxide right away, and there’s good reason for that. Carbon dioxide traps heat in the earth’s atmosphere and is, therefore, a major contributor to climate change.
Though not mentioned as frequently, methane is another greenhouse that we should pay more attention to. Methane is a primary component of natural gas and has a 25 times greater impact than carbon dioxide. The transportation of natural gas is where some methane leaks stem from, but the extraction and burning of natural gas is the main culprit for methane emissions. This highly flammable substance is typically transported through pipelines, and leaks are common. In 2018, Massachusetts had more than 16,000 leaks, with over 1,000 classified as “super-emitters” of methane. Boston, in particular, is vulnerable to leaks because, as one of the nation’s oldest cities, its natural gas pipes and infrastructure are worn down.
Methane has 32 time the warming potential of carbon dioxide over a 100-year period, meaning that methane losses need to be kept close to zero for natural gas to be a more sustainable option than coal. The transportation of natural gas is where the most methane leaks stem from. This highly flammable substance is typically transported through pipelines, and leaks are common. Oil drilling is another source of methane. Fuel sources are becoming increasingly limited, forcing intensive extraction processes. These unconventional sources, such as tar sands, emit up to three times more methane than other fossil fuels during during their mining and refining.
Human Health Risks
Human health risks start with mining and drilling workers. Underground miners are at risk of mine collapses and explosions, and contracting illnesses such as black lung disease. Human safety is also directly put at risk from natural gas transport. From 2010 to 2018, almost 600 injuries and more than 125 fatalities occurred because of pipeline incidents. Fracking has its own set of health risks. Studies have found that chemicals involved in fracking can cause headaches, asthma, cancer, birth defects, and cardiac problems. Additionally, studies have indicated that neighborhoods located near fracking sites experience increased rates of asthma, depression, pneumonia, cancer, and infant mortality. This is especially problematic because communities of color and low-income communities are more likely to be near these sites, creating environmental injustice. Air pollutants also cause acid rain, which increases the acidity of lakes and other bodies of water, harming aquatic ecosystems and damaging vegetation.
Oil spills also pose a threat to public health. For example, a recent study conducted by the Earth Institute at Columbia University found that children who lived in the area near where the Deepwater Horizon oil spill occurred suffered more physical and mental health problems than children from other areas. These consequences arose both from direct contact with oil contamination and indirect repercussions of the spill, such as financial hardships.
Fiscal Costs From Externalities
Things like land destruction, emissions, and health damages are hard to quantify and put a precise price on. The specific costs vary from study to study, but all demonstrate the fossil fuels have a real economic cost that is not shown in their upfront price. For instance, it’s estimated that air pollution from fossil fuels alone costs $8 million per day. Beyond everyday externalities, fossil fuels also have direct economic burdens for consumers. Since we only have a finite supply of fossil fuels, prices are volatile and buyers are subjected to fluctuations in price. Additionally, though the prices vary, we’ve seen several price spikes in previous years.
True Costs of Solar Energy
Solar, while it has many benefits compared to fossil fuels, still has its own costs to society and the environment. It has fewer impacts, but still does affect emissions, land and water resources, and utilizes hazardous materials in its construction.
Land Use Impacts
To maximize energy production, solar panels need a direct source of sunlight. As a result, some homeowners may get rid of a few of the trees on their property when they install solar. Utility-scale solar projects also pose a slight issue because they consume large areas of land. Traditionally, this has been an issue because it has prevented the land from being used for agriculture, but, recently there has been an emergence of low-impact solar installations that are compatible with agricultural use. Also, these solar arrays are encouraged to be installed on brownfields and other land not suitable for other purposes.
Water Supply and Pollution
Solar energy does not create any water pollution from runoff. Also, no water is necessary for the actual generation of solar electricity, but water is necessary in the manufacturing of components. Up to 650 gallons of water is used per megawatt-hour of electricity produced. Although this process still consumes some water, it’s only 1 or 2 percent of the water necessary for coal and natural gas energy production.
Greenhouse Gas Emissions
Hazardous materials, such as hydrochloric acid and acetone, are also used in solar cell manufacturing. These materials include hydrochloric acid, acetone, and others. These materials are expensive, so manufacturers often recycle them, but, if not handled properly, they can cause serious damage to the environment and human health. However, manufacturers are incentivized to recycle due to the rarity and high value of the hazardous materials.
Solar energy is responsible for some greenhouse gas emissions, but a lot. Again, when solar panels produce electricity they do not release greenhouse gases, but the process of manufacturing, transportation, installation, and disposing of solar panels does. However, studies have shown that after about 3 years of use, solar panels produce as much energy as was used throughout their production and installation process. For the remainder of a panel’s lifespan, it is carbon negative.
Human Health Risks
The main risks of solar energy are posed to installers, who often have to go onto roofs to install panels. These risks are not unique to the industry and OSHA has guidelines that aim to mitigate these hazards, such as crane and hoist safety standards.
Fiscal Costs of Solar
Over time the efficiency of solar panels has increased, and prices have decreased. Our potential to produce electricity from a renewable source like the sun is only constrained by our technology, and there’s no ceiling for technological progress. This continual advancement of solar technology is what has driven the cost of solar down, and this is why prices will continue to fall in the future.
Solar energy will save money over time, when compared to fossil fuels. Through the Federal Investment Tax Credit (ITC), the state tax credit, and performance-based incentives like the Solar Massachusetts Renewable Target Program (SMART), solar systems end up paying themselves with a quick return. Typically, homeowners in Massachusetts see a return on investment between six to eight years after installation and, due to the superior quality and performance of our systems, our customers usually see returns within five years. Then, it’s all savings. This is part of the reason why solar is cheaper per kWh than conventional electricity.
The Smart Choice
Both solar energy and fossil fuels impose costs on society that are not reflected in their prices. Yet, when comparing the two, it is crucial to weigh hidden costs against each other. It is clear that fossil fuels have a greater price based on the impacts on the environment and human health. Also, fossil fuels have less of a potential to lower those costs than a technology like solar that is constantly advancing. Solar energy is already saving ratepayers across the world money, as well as reducing negative impacts on our environment and health, and we will see that growth continue.
Make the Switch to Solar
Our team of local experts can help transition your home or business away from fossil fuels. Contact us to learn more about the benefits of clean energy and the role of renewables in a healthy, sustainable future.